Shockley, Inc., produces precision measuring instruments that it sells to other manufacturers, who then customize and distribute the products to research labs. They produce 15,000 units per year and incur the following costs and revenue:

Selling Price: $250

Costs:

Direct Material 40

Direct Labor 60

Variable overhead 30

Variable selling expenses 25

Unit Profit Before Tax 95

Management is considering selling their output directly to the labs for $300 per unit. Although no additional investment is required, additional processing costs are as follows:

Direct Labor 30

Variable Overhead 5

Variable Selling Expenses 2

Should Shockley sell directly to the labs? Or continue selling to other manufacturers? Why or why not?